In the Matter of Schmidt

Schmidt allegedly engaged in a course of conduct that deceived investors and made material omissions regarding the compensation that he and his member firm would receive in connection with various private placement offerings, according to FINRA. The complaint alleges that Schmidt recommended that his customers make purchases of interests in pre-initial public offering (IPO) companies through various private placement offerings, with a total principal value of $437,100. Ultimately, Schmidt allegedly received at least $19,888.05 in undisclosed compensation, according to FINRA. The complaint also alleges that Schmidt willfully violated Reg BI by failing to fully and fairly disclose in writing material facts relating to conflicts of interest and failing to conduct a reasonable investigation, or due diligence, to understand the offerings and reach a reasonable conclusion that they were in the best interests of at least some investors, according to FINRA.

Summary generated from official Financial Industry Regulatory Authority press release